PRIME minister David Cameron yesterday defended government plans to charge VAT on pies and pasties following opposition led by North Tyneside-based takeaway chain Greggs.
Mr Cameron said the move – set to add 20 per cent to the cost of hot pies and pasties sold by Greggs and its competitors – would help takeaways fend off competition from major chains.
Greggs fears the so-called pasty tax will hit trade at the 1,500-strong network of shops – including ones in Whitley Bay, Wallsend, North Shields, Forest Hall, Howdon and Killingworth – it runs from its HQ in Longbenton.
Chief executive Ken McMeikan said: “We will be vehemently putting forward our case to the government that the proposals are wrong and VAT should not apply to freshly-baked savouries.
“There’s a scenario where someone at the front of the queue is subject to VAT and the person at the back buying a product which has cooled down wouldn’t be.”
However, speaking at a press conference yesterday, Mr Cameron said the move would bring bakers into line with the VAT charged for over two decades on burger bars, fried chicken restaurants and fish-and-chip shops.
He said: “Many, many small businesses in this country, whether selling fried chicken or fish and chips or hot takeaway pies, are already paying VAT. What the government has to try to do is make sure the VAT rules are fairly applied.”
North Tyneside MP Mary Glindon said: “The pasty tax, despite its flippant title, will have serious economic consequences for bakers throughout the country.”
n Mary Glindon’s column is on Page 43.